Investment by Ipsos in Big Sofa
Appointment of Director
· Investment of £3 million by Ipsos at 18.5 pence per share, representing 20% of the enlarged issued ordinary share capital of Big Sofa
· Appointment of Ms Laurence Stoclet (Ipsos Group CFO and Deputy CEO) as a non-executive director
Big Sofa (AIM: BST), a fast-growing international video analytics provider to consumer brands and market research agencies, is pleased to announce that Ipsos S.A. (through its UK subsidiary, Ipsos MORI UK Limited; “Ipsos”), one of the world’s largest market research organisations, has agreed to invest approximately £3 million in Big Sofa by way of a subscription for 16,402,143 ordinary shares of 3 pence each (“Ordinary Shares”) (“Subscription Shares”) at a price of 18.5 pence per Ordinary Share for 20 per cent of the enlarged issued ordinary share capital of the Company (the “Investment”). The subscription price represents a premium of approximately 45 per cent on yesterday’s closing mid-market share price.
Big Sofa and Ipsos have been engaged in a successful and increasingly active trading relationship for more than two years. In April 2017, Big Sofa announced that the two companies had formalised this relationship with the signing of a Master Service Agreement (the “MSA”). Since signing the MSA, this trading relationship has deepened and is expected to continue to expand following Ipsos’ Investment.
Use of Funds
The Investment will enable Big Sofa to enhance its sales and marketing functions – particularly within the US – to take advantage of the considerable revenue-generating opportunities that Big Sofa is seeing ahead of it, as brands and research agencies increasingly recognise the value of incorporating video analysis into their consumer research strategies. It will also enable Big Sofa to accelerate further investment in its video analytics platform and technology infrastructure, resulting in a more scalable platform, as the pipeline of prospective work increases, but a longer lead time to operational breakeven. Furthermore, while Big Sofa’s technology platform already enables automated data ingestion, analysis and visualisation, the Investment will enable the Company to accelerate development of new kinds of analysis that link consumer context and behaviour, driving greater value for clients, either directly or as part of their knowledge management systems.
Prior to the Company’s admission to trading on the AIM market of London Stock Exchange plc (“AIM”) in December 2016, its subsidiary, Big Sofa Technologies Limited, borrowed £0.675 million from Eridge Capital Limited (“Eridge”) (formerly known as New World Oil and Gas plc) by way of a convertible loan (the “Convertible Loan”). The Convertible Loan is convertible into new Ordinary Shares at the election of Eridge and, if not converted, is repayable by Big Sofa Technologies Limited on or before 31 December 2018. Big Sofa intends to utilise approximately £0.7 million of the Investment proceeds to satisfy the repayment of the outstanding Convertible Loan (including any applicable interest), to the extent it is not converted into Ordinary Shares at the election of Eridge before then.
Appointment of Director
Big Sofa is pleased to announce that Ms Laurence Stoclet will be appointed to the board of directors of the Company (“Board”) as a non-executive director following admission of the Subscription Shares to trading on AIM (“Admission”). Ms Stoclet serves as the Deputy Chief Executive Officer, Group Chief Financial Officer and Support Functions Director at Ipsos. She joined Ipsos as Chief Financial Officer in 1998. All the costs of Ms Stoclet’s appointment and remuneration will be borne by Ipsos.
Simon Lidington, Chief Executive Officer of Big Sofa, commented:
“We are extremely proud that Ipsos has chosen to invest in the considerable potential of Big Sofa’s technology to be applied both within their industry and potentially in wider areas. Following our collaboration on a large number of projects, Ipsos has seen first-hand the value that Big Sofa’s video observation and analytics technology already delivers to clients. Their Investment is intended to help Big Sofa develop faster as an innovative technology business and enable us to add additional capacity to take advantage of the opportunities to accelerate our rate of revenue growth.
“We will be delighted to welcome Laurence Stoclet to the Board of Big Sofa. Her 20 years’ experience at the financial, operational and IT helm of one of the world’s largest research agency groups will be invaluable to Big Sofa as we continue to work towards realising our vision of becoming the platform of choice for the world’s leading companies and organisations that helps them see, understand and learn from real human behaviour.”
Didier Truchot, Chief Executive Officer of Ipsos, commented:
“Ipsos is investing in technology which we believe has the potential not only to transform the consumer research market in which we operate, but also to disrupt other sectors where codification, discovery, learning and meaning are equally transformed through the use of visual data. We have tremendous respect for Big Sofa’s brand and its leadership team and believe strongly in the opportunity to create meaningful long-term value for our respective shareholders, employees and customers.”
Details of the Subscription
Admission of Shares
The Investment is conditional upon Admission. Application will be made for admission of the Subscription Shares to trading on AIM and this is expected to take place on 9 March 2018. The Subscription Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the ordinary share capital of the Company after the date of their issue and will otherwise rank pari passu in all other respects with the Company’s existing Ordinary Shares.
Ipsos has agreed to subscribe for the Subscription Shares pursuant to the terms of a subscription agreement between the Company and Ipsos (“Subscription Agreement”). The Subscription Agreement includes customary lock-in and orderly market provisions. The Subscription Agreement provides that for so long as Ipsos holds Ordinary Shares amounting to over 10 per cent of the share capital of the Company, Ipsos will be entitled to require the appointment of one director to the Board.
The Subscription Agreement contains customary warranties from the Company to Ipsos. The maximum aggregate liability of the Company under the warranties it has given in favour of Ipsos is equal to the gross proceeds of the Subscription.
The Subscription Shares will represent approximately 20 per cent of the enlarged issued ordinary share capital of the Company. Consequently, Ipsos will, from Admission, become a “substantial shareholder” as defined in the AIM Rules for Companies. The Subscription Agreement therefore includes provisions to regulate the relationship between Ipsos and the Company so that Ipsos’ position as a “substantial shareholder” is not abused. These provisions will remain in force until Ipsos ceases to be the holder of Ordinary Shares representing over 10 per cent of the issued ordinary share capital of the Company.
Future Related Party Transactions
Ipsos will, from Admission, become a “substantial shareholder” as defined in the AIM Rules for Companies and, as such, a “related party”. Thereafter, all trading transactions between the Company and Ipsos will fall to be tested as related party transactions under AIM Rule 13. The Company has traded with Ipsos for more than two years and has conducted many individual projects. This trading relationship is expected to continue post-Admission.
About Big Sofa Technologies Group plc
Big Sofa is a B2B technology business servicing the marketing and consumer insight industries with video analytics.
Our software platform collates, analyses and organises large volumes of raw/unstructured video content enabling companies to perform detailed and sophisticated consumer insight analysis; and make genuine use of their video content.
Until recently, video has been difficult and expensive to capture, upload, store, manage and analyse as a consumer insight tool. However, proliferation of smart phones has empowered consumers to speak directly to brands resulting in an evolution of consumer insight and data analytics techniques, with video emerging as a key platform in a massive $33 billion consumer research market.
Big Sofa’s shares are admitted to trading on the London Stock Exchange’s AIM market under the ticker BST.L.
To find out more, visit www.bigsofatech.com
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